Self-Regulatory Organizations; Miami International Securities Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule, 38789-38791 [2015-16544]
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38789
Federal Register / Vol. 80, No. 129 / Tuesday, July 7, 2015 / Notices
I. Self-Regulatory Organization’s
Statement of the Terms of the Substance
of the Proposed Rule Change
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–75334; File No. SR–MIAX–
2015–42]
Self-Regulatory Organizations; Miami
International Securities Exchange LLC;
Notice of Filing and Immediate
Effectiveness of a Proposed Rule
Change To Amend Its Fee Schedule
June 30, 2015.
Pursuant to the provisions of Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’),1 and Rule 19b–4
thereunder,2 notice is hereby given that
on June 24, 2015, Miami International
Securities Exchange LLC (‘‘MIAX’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) a proposed rule change
as described in Items I, II, and III below,
which Items have been prepared by the
Exchange. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
Tier
1
2
3
4
5
...........................................
...........................................
...........................................
...........................................
...........................................
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 ‘‘MIAX Market Maker’’ for purposes of the
proposed sliding scale means any MIAX Market
Maker including RMM, LMM, PLMM, DLMM, and
DPLMM.
4 The Commission notes that the Exchange
proposes to change the Percentage Thresholds of
National Market Maker Volume for tier 3 from
‘‘Above 0.50%–0.80%’’ to ‘‘Above 0.50%–1.00%’’
2 17
tkelley on DSK3SPTVN1PROD with NOTICES
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
1. Purpose
The Exchange proposes to amend its
current MIAX Market Maker 3 sliding
scale for transaction fees to: (i) Modify
the volume thresholds in tiers 3, 4; 4 (ii)
increase the transaction fee for volume
tier 2; 5 and (iii) increase the Priority
Customer rebate incentive for tier 2.
The sliding scale for MIAX Market
Maker transaction fees is based on the
substantially similar fees of the Chicago
Board Options Exchange, Incorporated
(‘‘CBOE’’).6 Specifically, the program
reduces a MIAX Market Maker’s per
contract transaction fee based on
percentages of total national Market
Maker volume of any options classes
that trade on the exchange during the
calendar month, based on the following
scale:
Per contract fee
for penny classes
0.00%–0.05% ............................................................................................
Above 0.05%–0.50% .................................................................................
Above 0.50%–1.00% .................................................................................
Above 1.00%–1.50% .................................................................................
Above 1.50% .............................................................................................
1 15
20:31 Jul 06, 2015
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
Percentage of national Market Maker volume
The sliding scale would apply to all
MIAX Market Makers for transactions in
all products except mini-options. A
MIAX Market Maker’s initial $0.25 per
contract rate in Penny Pilot classes and
$0.29 per contract in non-Penny Pilot
classes will be reduced if the MIAX
Market Maker reaches the volume
thresholds set forth in the sliding scale
in a month. As a MIAX Market Maker’s
monthly volume increases, its per
contract transaction fee would decrease.
The Market Maker sliding scale will
continue to apply to MIAX Market
Maker (RMM, LMM, DLMM, PLMM,
DPLMM) transaction fees in all products
except mini-options. MIAX Market
Makers will continue to be assessed a
VerDate Sep<11>2014
The Exchange is filing a proposal to
amend the MIAX Options Fee Schedule.
The text of the proposed rule change
is available on the Exchange’s Web site
at https://www.miaxoptions.com/filter/
wotitle/rule_filing, at MIAX’s principal
office, and at the Commission’s Public
Reference Room.
the most significant aspects of such
statements.
Jkt 235001
$0.25
0.19
0.12
0.07
0.05
Per contract fee
for non-penny
classes
$0.29
0.23
0.16
0.11
0.09
$0.02 per executed contract fee for
transactions in mini-options.
The Exchange believes the proposed
sliding scale is objective in that the fee
reductions are based solely on reaching
stated volume thresholds. The specific
volume thresholds of the tiers were set
based upon business determinations
and an analysis of current volume
levels. The specific volume thresholds
and rates were set in order to encourage
MIAX Market Makers to reach for higher
tiers. The Exchange believes that the
proposed changes to the tiered fee
schedule may incent firms to display
their orders on the Exchange and
increase the volume of contracts traded
here.
As mentioned above, the Exchange
notes that the proposed sliding fee scale
for MIAX Market Makers structured on
contract volume thresholds is based on
the substantially similar fees of the
CBOE.7 The Exchange also notes that a
number of other exchanges have tiered
fee schedules which offer different
transaction fee rates depending on the
monthly ADV of liquidity providing
executions on their facilities.8
The Exchange also proposes to
increase the rebate incentive for Priority
Customer orders to correspond with the
increase in the transaction fee for tier 2
of the MIAX Market Maker sliding scale.
The Exchange offers MIAX Market
Makers the opportunity to reduce
transaction fees by $0.02 per contract in
and for tier 4 from ‘‘Above 0.80%–1.50%’’ to
‘‘Above 1.00%–1.50%.’’
5 The Commission notes that the Exchange
proposes to increase the transaction fee for tier 2
from $0.17 to $0.19 for Penny Classes and from
$0.21 to $0.23 for Non-Penny Classes.
6 See Securities Exchange Act Release Nos. 55193
(January 30, 2007), 72 FR 5476 (February 6, 2007)
(SR–CBOE–2006–111); 57191 (January 24, 2008), 73
FR 5611 (January 30, 2008); 58321 (August 6, 2008),
73 FR 46955 (SR–CBOE–2008–78). See also CBOE
Fees Schedule, p. 3.
7 See Securities Exchange Act Release Nos. 55193
(January 30, 2007), 72 FR 5476 (February 6, 2007)
(SR–CBOE–2006–111); 58321 (August 6, 2008), 73
FR 46955 (SR–CBOE–2008–78); 71295 (January 14,
2014), 79 FR 3443 (January 21, 2014) (SR–CBOE–
2013–129). The Exchange notes that CBOE does not
charge market makers a differentiated transaction
fee for non-Penny Pilot option classes.
8 See, e.g., International Securities Exchange,
LLC, Schedule of Fees, Section IV, C; NASDAQ
Options Market, Chapter XV, Section 2.
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Federal Register / Vol. 80, No. 129 / Tuesday, July 7, 2015 / Notices
tkelley on DSK3SPTVN1PROD with NOTICES
standard options if the Member or its
affiliates of at least 75% common
ownership between the firms as
reflected on each firm’s Form BD,
Schedule A, qualifies in a given month
for Priority Customer Rebate Program
volume tiers 3, 4, or 5 in the Fee
Schedule. The Exchange proposes to
amend the rebate incentive for Priority
Customer orders in order to increase the
rebate incentive for tier 2 to correspond
with the increase in transaction fees for
volume tier 2 of the MIAX Market
Maker sliding scale. As proposed, any
Member or its affiliates of at least 75%
common ownership between the firms
as reflected on each firm’s Form BD,
Schedule A, that qualifies for Priority
Customer Rebate Program volume tiers
3, 4, or 5 and is a MIAX Market Maker
will be assessed $0.23 per contract for
tier 1, $0.17 per contract for tier 2, $0.10
per contract for tier 3, $0.05 per contract
for tier 4, and $0.03 per contract for tier
5 for transactions in standard options
Penny Pilot classes in lieu of the
applicable transaction fees in the Market
Maker sliding scale. Any Member or its
affiliates of at least 75% common
ownership between the firms as
reflected on each firm’s Form BD,
Schedule A, that qualifies for Priority
Customer Rebate Program volume tiers
3, 4, or 5 will be assessed $0.27 per
contract for tier 1, $0.21 per contract for
tier 2, $0.14 per contract for tier 3, $0.09
per contract for tier 4, and $0.07 per
contract for tier 5 for transactions in
standard options in non-Penny Pilot
classes in lieu of the applicable
transaction fees in the Market Maker
sliding scale. The Exchange believes
that these incentives will encourage
MIAX Market Makers to transact a
greater number of orders on the
Exchange.
The proposed changes will become
operative on July 1, 2015.
2. Statutory Basis
The Exchange believes that its
proposal to amend its fee schedule is
consistent with Section 6(b) of the Act 9
in general, and furthers the objectives of
Section 6(b)(4) of the Act 10 in
particular, in that it is an equitable
allocation of reasonable fees and other
charges among Exchange members.
The proposed volume based discount
fee structure is not discriminatory in
that all MIAX Market Makers are
eligible to submit (or not submit)
liquidity, and may do so at their
discretion in the daily volumes they
choose during the course of the billing
period. All similarly situated MIAX
9 15
U.S.C. 78f(b).
U.S.C. 78f(b)(4).
10 15
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20:31 Jul 06, 2015
Jkt 235001
Market Makers are subject to the same
fee structure, and access to the
Exchange is offered on terms that are
not unfairly discriminatory. Volume
based discounts have been widely
adopted by options and equities
markets, and are equitable because they
are open to all MIAX Market Makers on
an equal basis and provide discounts
that are reasonably related to the value
of an exchange’s market quality
associated with higher volumes. The
proposed fee levels and volume
thresholds are reasonably designed to be
comparable to those of other options
exchanges employing similar fee
programs, and also to attract additional
liquidity and order flow to the
Exchange.
The Exchange’s proposal to provide
MIAX Market Makers the opportunity to
reduce transaction fees by $0.02 per
contract in standard options, provided
certain criteria are met, is reasonable
because the Exchange desires to offer all
such market participants an opportunity
to lower their transaction fees. The
Exchange’s proposal to offer MIAX
Market Makers the opportunity to
reduce transaction fees by $0.02 per
contract in standard options, provided
certain criteria are met, is equitable and
not unfairly discriminatory because the
Exchange offers all market participants,
excluding Priority Customers, a means
to reduce transaction fees by qualifying
for volume tiers in the Priority Customer
Rebate Program. The Exchange believes
that offering all such market
participants the opportunity to lower
transaction fees by incentivizing them to
transact Priority Customer order flow in
turn benefits all market participants.
The Exchange believes that its
proposal to assess transaction fees in
non-Penny Pilot options classes, which
differs from Penny Pilot options classes,
is consistent with other options markets
that also assess different transaction fees
for non-Penny Pilot options classes as
compared to Penny Pilot options
classes. The Exchange believes that
establishing different pricing for nonPenny Pilot options and Penny Pilot
options is reasonable, equitable, and not
unfairly discriminatory because Penny
Pilot options are more liquid options as
compared to non-Penny Pilot options.
Additionally, other competing options
exchanges differentiate pricing in a
similar manner today in other types of
transaction fees.11
11 See NASDAQ OMX PHLX LLC Pricing
Schedule, Section II (assessing differentiated
transaction fees for Penny Pilot and non-Penny
Pilot options classes); NYSE Amex Options Fee
Schedule, p. 6 (assessing differentiated transaction
fees for Penny Pilot and non-Penny Pilot options
classes); Chicago Board Options Exchange,
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B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition not
necessary or appropriate in furtherance
of the purposes of the Act. The
Exchange notes that it operates in a
highly competitive market in which
market participants can readily favor
competing venues if they deem fee
levels at a particular venue to be
excessive. In such an environment, the
Exchange must continually adjust its
fees to remain competitive with other
exchanges and to attract order flow. The
Exchange believes that the proposed
rule change reflects this competitive
environment because it modifies the
Exchange’s fees in a manner that
encourages market participants to
provide liquidity and to send order flow
to the Exchange.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
Written comments were neither
solicited nor received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section
19(b)(3)(A)(ii) of the Act.12 At any time
within 60 days of the filing of the
proposed rule change, the Commission
summarily may temporarily suspend
such rule change if it appears to the
Commission that such action is
necessary or appropriate in the public
interest, for the protection of investors,
or otherwise in furtherance of the
purposes of the Act. If the Commission
takes such action, the Commission shall
institute proceedings to determine
whether the proposed rule should be
approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Incorporated, Fee Schedule, p. 1 (assessing
differentiated transaction fees for Penny Pilot and
non-Penny Pilot options classes). See also
Securities Exchange Act Release No. 68556 (January
2, 2013), 78 FR 1293 (January 8, 2013) (SR–BX–
2012–074). Please note that neither of these
exchanges currently has differentiated pricing for
non-Penny Pilot options classes in a tiered volume
scale for market makers.
12 15 U.S.C. 78s(b)(3)(A)(ii).
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Federal Register / Vol. 80, No. 129 / Tuesday, July 7, 2015 / Notices
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rulecomments@sec.gov. Please include File
Number SR–MIAX–2015–42 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities
and Exchange Commission, 100 F Street
NE., Washington, DC 20549–1090.
tkelley on DSK3SPTVN1PROD with NOTICES
All submissions should refer to File
Number SR–MIAX–2015–42. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml).
Copies of the submission, all
subsequent amendments, all written
statements with respect to the proposed
rule change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549 on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–MIAX–
2015–42, and should be submitted on or
before July 28, 2015.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015–16544 Filed 7–6–15; 8:45 am]
BILLING CODE 8011–01–P
[Release No. 34–75339; File No. SR–FINRA–
2015–021]
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Adopt Rule 7650A
Relating to Debit Process for the
Collection of FINRA/Nasdaq Trade
Reporting Facility Fees
comments it received on the proposed
rule change. The text of these statements
may be examined at the places specified
in Item IV below. FINRA has prepared
summaries, set forth in sections A, B,
and C below, of the most significant
aspects of such statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
SECURITIES AND EXCHANGE
COMMISSION
June 30, 2015.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on June 23,
2015, Financial Industry Regulatory
Authority, Inc. (‘‘FINRA’’) filed with the
Securities and Exchange Commission
(‘‘SEC’’ or ‘‘Commission’’) the proposed
rule change as described in Items I and
II below, which Items have been
prepared by FINRA. FINRA has
designated the proposed rule change as
constituting a ‘‘non-controversial’’ rule
change under paragraph (f)(6) of Rule
19b–4 under the Act,3 which renders
the proposal effective upon receipt of
this filing by the Commission. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of the Substance
of the Proposed Rule Change
FINRA is proposing to adopt FINRA
Rule 7650A (Collection of Fees) to
require FINRA members that are
FINRA/Nasdaq Trade Reporting Facility
(‘‘FINRA/Nasdaq TRF’’) participants to
provide a clearing account number for
an account at the National Securities
Clearing Corporation (‘‘NSCC’’) for
purposes of permitting the FINRA/
Nasdaq TRF to debit undisputed or final
fees due and owing by the member
under the Rule 7600A Series.
The text of the proposed rule change
is available on FINRA’s Web site at
https://www.finra.org, at the principal
office of FINRA and at the
Commission’s Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
FINRA included statements concerning
the purpose of and basis for the
proposed rule change and discussed any
1 15
13 17
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 17 CFR 240.19b–4(f)(6).
CFR 200.30–3(a)(12).
VerDate Sep<11>2014
20:31 Jul 06, 2015
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38791
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1. Purpose
The FINRA/Nasdaq TRF is a facility
of FINRA that is operated by The
NASDAQ OMX Group, Inc. (‘‘NASDAQ
OMX’’). In connection with the
establishment of the FINRA/Nasdaq
TRF, FINRA and NASDAQ OMX
entered into a limited liability company
agreement (the ‘‘LLC Agreement’’).
Under the LLC Agreement, FINRA, the
‘‘SRO Member,’’ has sole regulatory
responsibility for the FINRA/Nasdaq
TRF. NASDAQ OMX, the ‘‘Business
Member,’’ is primarily responsible for
the management of the FINRA/Nasdaq
TRF’s business affairs to the extent
those affairs are not inconsistent with
the regulatory and oversight functions of
FINRA. As such, the Business Member
establishes pricing for use of the FINRA/
Nasdaq TRF, and such pricing is
implemented pursuant to FINRA rules
that must be filed with the SEC and be
consistent with the Act. In addition, the
Business Member is obligated to pay the
cost of regulation and is entitled to the
profits and losses, if any, derived from
the operation of the FINRA/Nasdaq
TRF.
Pursuant to the FINRA Rule 7600A
Series, FINRA members that are FINRA/
Nasdaq TRF participants are charged
fees (Rule 7620A) and also may qualify
for credits for trade reporting to the
FINRA/Nasdaq TRF (Rule 7610A).
These rules are administered by
NASDAQ OMX, in its capacity as the
‘‘Business Member’’ and operator of the
FINRA/Nasdaq TRF on behalf of
FINRA,4 and NASDAQ OMX collects all
fees on behalf of the FINRA/Nasdaq
TRF. FINRA is proposing to adopt Rule
7650A to require FINRA members that
are FINRA/Nasdaq TRF participants to
provide a clearing account number for
an account at NSCC to the FINRA/
Nasdaq TRF for purposes of permitting
NASDAQ OMX, on behalf of the
FINRA/Nasdaq TRF, to debit any
undisputed or final fees due and owing
under the FINRA Rule 7600A Series
relating to the FINRA/Nasdaq TRF.
4 FINRA’s oversight of this function performed by
the Business Member is conducted through a
recurring assessment and review of TRF operations
by an outside independent audit firm.
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Agencies
[Federal Register Volume 80, Number 129 (Tuesday, July 7, 2015)]
[Notices]
[Pages 38789-38791]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-16544]
[[Page 38789]]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-75334; File No. SR-MIAX-2015-42]
Self-Regulatory Organizations; Miami International Securities
Exchange LLC; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Amend Its Fee Schedule
June 30, 2015.
Pursuant to the provisions of Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice
is hereby given that on June 24, 2015, Miami International Securities
Exchange LLC (``MIAX'' or ``Exchange'') filed with the Securities and
Exchange Commission (``Commission'') a proposed rule change as
described in Items I, II, and III below, which Items have been prepared
by the Exchange. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change
The Exchange is filing a proposal to amend the MIAX Options Fee
Schedule.
The text of the proposed rule change is available on the Exchange's
Web site at https://www.miaxoptions.com/filter/wotitle/rule_filing, at
MIAX's principal office, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend its current MIAX Market Maker \3\
sliding scale for transaction fees to: (i) Modify the volume thresholds
in tiers 3, 4; \4\ (ii) increase the transaction fee for volume tier 2;
\5\ and (iii) increase the Priority Customer rebate incentive for tier
2.
---------------------------------------------------------------------------
\3\ ``MIAX Market Maker'' for purposes of the proposed sliding
scale means any MIAX Market Maker including RMM, LMM, PLMM, DLMM,
and DPLMM.
\4\ The Commission notes that the Exchange proposes to change
the Percentage Thresholds of National Market Maker Volume for tier 3
from ``Above 0.50%-0.80%'' to ``Above 0.50%-1.00%'' and for tier 4
from ``Above 0.80%-1.50%'' to ``Above 1.00%-1.50%.''
\5\ The Commission notes that the Exchange proposes to increase
the transaction fee for tier 2 from $0.17 to $0.19 for Penny Classes
and from $0.21 to $0.23 for Non-Penny Classes.
---------------------------------------------------------------------------
The sliding scale for MIAX Market Maker transaction fees is based
on the substantially similar fees of the Chicago Board Options
Exchange, Incorporated (``CBOE'').\6\ Specifically, the program reduces
a MIAX Market Maker's per contract transaction fee based on percentages
of total national Market Maker volume of any options classes that trade
on the exchange during the calendar month, based on the following
scale:
---------------------------------------------------------------------------
\6\ See Securities Exchange Act Release Nos. 55193 (January 30,
2007), 72 FR 5476 (February 6, 2007) (SR-CBOE-2006-111); 57191
(January 24, 2008), 73 FR 5611 (January 30, 2008); 58321 (August 6,
2008), 73 FR 46955 (SR-CBOE-2008-78). See also CBOE Fees Schedule,
p. 3.
----------------------------------------------------------------------------------------------------------------
Per contract fee
Tier Percentage of national Market Per contract fee for non-penny
Maker volume for penny classes classes
----------------------------------------------------------------------------------------------------------------
1.......................................... 0.00%-0.05%.................. $0.25 $0.29
2.......................................... Above 0.05%-0.50%............ 0.19 0.23
3.......................................... Above 0.50%-1.00%............ 0.12 0.16
4.......................................... Above 1.00%-1.50%............ 0.07 0.11
5.......................................... Above 1.50%.................. 0.05 0.09
----------------------------------------------------------------------------------------------------------------
The sliding scale would apply to all MIAX Market Makers for
transactions in all products except mini-options. A MIAX Market Maker's
initial $0.25 per contract rate in Penny Pilot classes and $0.29 per
contract in non-Penny Pilot classes will be reduced if the MIAX Market
Maker reaches the volume thresholds set forth in the sliding scale in a
month. As a MIAX Market Maker's monthly volume increases, its per
contract transaction fee would decrease. The Market Maker sliding scale
will continue to apply to MIAX Market Maker (RMM, LMM, DLMM, PLMM,
DPLMM) transaction fees in all products except mini-options. MIAX
Market Makers will continue to be assessed a $0.02 per executed
contract fee for transactions in mini-options.
The Exchange believes the proposed sliding scale is objective in
that the fee reductions are based solely on reaching stated volume
thresholds. The specific volume thresholds of the tiers were set based
upon business determinations and an analysis of current volume levels.
The specific volume thresholds and rates were set in order to encourage
MIAX Market Makers to reach for higher tiers. The Exchange believes
that the proposed changes to the tiered fee schedule may incent firms
to display their orders on the Exchange and increase the volume of
contracts traded here.
As mentioned above, the Exchange notes that the proposed sliding
fee scale for MIAX Market Makers structured on contract volume
thresholds is based on the substantially similar fees of the CBOE.\7\
The Exchange also notes that a number of other exchanges have tiered
fee schedules which offer different transaction fee rates depending on
the monthly ADV of liquidity providing executions on their
facilities.\8\
---------------------------------------------------------------------------
\7\ See Securities Exchange Act Release Nos. 55193 (January 30,
2007), 72 FR 5476 (February 6, 2007) (SR-CBOE-2006-111); 58321
(August 6, 2008), 73 FR 46955 (SR-CBOE-2008-78); 71295 (January 14,
2014), 79 FR 3443 (January 21, 2014) (SR-CBOE-2013-129). The
Exchange notes that CBOE does not charge market makers a
differentiated transaction fee for non-Penny Pilot option classes.
\8\ See, e.g., International Securities Exchange, LLC, Schedule
of Fees, Section IV, C; NASDAQ Options Market, Chapter XV, Section
2.
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The Exchange also proposes to increase the rebate incentive for
Priority Customer orders to correspond with the increase in the
transaction fee for tier 2 of the MIAX Market Maker sliding scale. The
Exchange offers MIAX Market Makers the opportunity to reduce
transaction fees by $0.02 per contract in
[[Page 38790]]
standard options if the Member or its affiliates of at least 75% common
ownership between the firms as reflected on each firm's Form BD,
Schedule A, qualifies in a given month for Priority Customer Rebate
Program volume tiers 3, 4, or 5 in the Fee Schedule. The Exchange
proposes to amend the rebate incentive for Priority Customer orders in
order to increase the rebate incentive for tier 2 to correspond with
the increase in transaction fees for volume tier 2 of the MIAX Market
Maker sliding scale. As proposed, any Member or its affiliates of at
least 75% common ownership between the firms as reflected on each
firm's Form BD, Schedule A, that qualifies for Priority Customer Rebate
Program volume tiers 3, 4, or 5 and is a MIAX Market Maker will be
assessed $0.23 per contract for tier 1, $0.17 per contract for tier 2,
$0.10 per contract for tier 3, $0.05 per contract for tier 4, and $0.03
per contract for tier 5 for transactions in standard options Penny
Pilot classes in lieu of the applicable transaction fees in the Market
Maker sliding scale. Any Member or its affiliates of at least 75%
common ownership between the firms as reflected on each firm's Form BD,
Schedule A, that qualifies for Priority Customer Rebate Program volume
tiers 3, 4, or 5 will be assessed $0.27 per contract for tier 1, $0.21
per contract for tier 2, $0.14 per contract for tier 3, $0.09 per
contract for tier 4, and $0.07 per contract for tier 5 for transactions
in standard options in non-Penny Pilot classes in lieu of the
applicable transaction fees in the Market Maker sliding scale. The
Exchange believes that these incentives will encourage MIAX Market
Makers to transact a greater number of orders on the Exchange.
The proposed changes will become operative on July 1, 2015.
2. Statutory Basis
The Exchange believes that its proposal to amend its fee schedule
is consistent with Section 6(b) of the Act \9\ in general, and furthers
the objectives of Section 6(b)(4) of the Act \10\ in particular, in
that it is an equitable allocation of reasonable fees and other charges
among Exchange members.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(4).
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The proposed volume based discount fee structure is not
discriminatory in that all MIAX Market Makers are eligible to submit
(or not submit) liquidity, and may do so at their discretion in the
daily volumes they choose during the course of the billing period. All
similarly situated MIAX Market Makers are subject to the same fee
structure, and access to the Exchange is offered on terms that are not
unfairly discriminatory. Volume based discounts have been widely
adopted by options and equities markets, and are equitable because they
are open to all MIAX Market Makers on an equal basis and provide
discounts that are reasonably related to the value of an exchange's
market quality associated with higher volumes. The proposed fee levels
and volume thresholds are reasonably designed to be comparable to those
of other options exchanges employing similar fee programs, and also to
attract additional liquidity and order flow to the Exchange.
The Exchange's proposal to provide MIAX Market Makers the
opportunity to reduce transaction fees by $0.02 per contract in
standard options, provided certain criteria are met, is reasonable
because the Exchange desires to offer all such market participants an
opportunity to lower their transaction fees. The Exchange's proposal to
offer MIAX Market Makers the opportunity to reduce transaction fees by
$0.02 per contract in standard options, provided certain criteria are
met, is equitable and not unfairly discriminatory because the Exchange
offers all market participants, excluding Priority Customers, a means
to reduce transaction fees by qualifying for volume tiers in the
Priority Customer Rebate Program. The Exchange believes that offering
all such market participants the opportunity to lower transaction fees
by incentivizing them to transact Priority Customer order flow in turn
benefits all market participants.
The Exchange believes that its proposal to assess transaction fees
in non-Penny Pilot options classes, which differs from Penny Pilot
options classes, is consistent with other options markets that also
assess different transaction fees for non-Penny Pilot options classes
as compared to Penny Pilot options classes. The Exchange believes that
establishing different pricing for non-Penny Pilot options and Penny
Pilot options is reasonable, equitable, and not unfairly discriminatory
because Penny Pilot options are more liquid options as compared to non-
Penny Pilot options. Additionally, other competing options exchanges
differentiate pricing in a similar manner today in other types of
transaction fees.\11\
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\11\ See NASDAQ OMX PHLX LLC Pricing Schedule, Section II
(assessing differentiated transaction fees for Penny Pilot and non-
Penny Pilot options classes); NYSE Amex Options Fee Schedule, p. 6
(assessing differentiated transaction fees for Penny Pilot and non-
Penny Pilot options classes); Chicago Board Options Exchange,
Incorporated, Fee Schedule, p. 1 (assessing differentiated
transaction fees for Penny Pilot and non-Penny Pilot options
classes). See also Securities Exchange Act Release No. 68556
(January 2, 2013), 78 FR 1293 (January 8, 2013) (SR-BX-2012-074).
Please note that neither of these exchanges currently has
differentiated pricing for non-Penny Pilot options classes in a
tiered volume scale for market makers.
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The Exchange notes that it
operates in a highly competitive market in which market participants
can readily favor competing venues if they deem fee levels at a
particular venue to be excessive. In such an environment, the Exchange
must continually adjust its fees to remain competitive with other
exchanges and to attract order flow. The Exchange believes that the
proposed rule change reflects this competitive environment because it
modifies the Exchange's fees in a manner that encourages market
participants to provide liquidity and to send order flow to the
Exchange.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act.\12\ At any time within 60 days of the
filing of the proposed rule change, the Commission summarily may
temporarily suspend such rule change if it appears to the Commission
that such action is necessary or appropriate in the public interest,
for the protection of investors, or otherwise in furtherance of the
purposes of the Act. If the Commission takes such action, the
Commission shall institute proceedings to determine whether the
proposed rule should be approved or disapproved.
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\12\ 15 U.S.C. 78s(b)(3)(A)(ii).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
[[Page 38791]]
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-MIAX-2015-42 on the subject line.
Paper Comments
Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-MIAX-2015-42. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for Web site viewing and printing in
the Commission's Public Reference Room, 100 F Street NE., Washington,
DC 20549 on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of such filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change; the Commission does not edit
personal identifying information from submissions. You should submit
only information that you wish to make available publicly. All
submissions should refer to File Number SR-MIAX-2015-42, and should be
submitted on or before July 28, 2015.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-16544 Filed 7-6-15; 8:45 am]
BILLING CODE 8011-01-P